Like many of you reading this, at Diligent we’re just starting out on our own ESG journey. And like many of you, we’ve had to answer the same questions and overcome the same uncertainties: Where do I start? How do I start? What does ‘success’ look like when it comes to ESG?
In this blog post, I’ll share some lessons learned from the experiences we’ve had since we began our ESG journey at the beginning of 2022, as well as some tips and tricks that can help jumpstart your progress with ESG.
What Are the Crucial Points to Consider Before You Start?
It’s essential to lay the groundwork before you begin. Remember that foundational ESG programs and policies can – and likely will – evolve over time. Your first year will be all about establishing processes and procedures that give you the ability to track, measure and report with greater accuracy and ease over time.
It’s also important to:
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Leverage workflows and processes already in place to help further implement and integrate ESG practices. Think about what your company is doing right when it comes to sustainability policies, social impact giving, or data collection and what it would look like to operationalize or formalize those procedures to help stand up your ESG program.
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Establish the importance of ESG by demonstrating value for the business and ensure ‘buy in’ by building consensus and facilitating collaboration. In order to stay competitive, companies across industries are having to not only pull back the curtain on their sustainability and social good practices but also assess, analyze, and improve them. Determining how best to position your company to stay successful will help drive business value and secure stakeholder engagement.
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Champion ESG as part of your organization’s mission and values. Look at key ways to align the company’s “mission critical” objectives with being a responsible organization. When ESG is made as attainable and accessible as possible it's much easier to embed it in the organizational DNA.
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Keep all necessary stakeholders up to speed throughout the process. Creating a feedback loop - whether it be through monthly leadership updates, townhall meetings, ESG reports or anything similar - can help to provide features and products that evolve with you as your ESG program matures.
How Do You Get Started?
With all those things in mind, it’s time to get started. Firstly, determine whether a materiality assessment or a streamlined organizational assessment fits your needs as a company. It depends on your industry, sector and size but it's a fundamental step to take. We took the following steps for our organizational assessment:
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Conduct a historical analysis: What has your organization done and said about ESG to date?
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Benchmarking: What are our competitors up to? What have they achieved? What steps have they taken?
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Conduct internal interviews: Find out what ESG currently means to your organization and use this to identify where there are opportunities, as well as potential risks.
Using this information, we outlined a recommended framework, put together roadmaps for strategic pillars and focus areas that helped bridge operational and organizational gaps, and identified quick wins to enhance and amplify current sustainability and social impact initiatives.
What Do I Wish I’d Known Before Starting an ESG Program?
It's important to remember that you’ll always face curveballs. Not everything will run smoothly, and each organization is unique. ESG isn’t a race – in order to do it efficiently, accurately, and with integrity take the time to identify what aligns with your company’s mission and values and best practice.
ESG is becoming increasingly more visible and important not just to investors but to all stakeholders – from communities to employees to consumers. It can seem overwhelming at first but starting early and starting small is critical to success and having the right tools at your disposal make it that much easier.
The mistake I’ve seen a lot of companies make is that they wait until they have a critical mass of data and information that’s completely unwieldly and badly stored in systems that aren’t designed for ESG tracking. They then find themselves in a scramble to find a solution.
I’d also suggest:
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Year one should be about establishing a blueprint. One of the things I’m tasked with at Diligent is calculating our carbon footprint, and it took me three months to realize I had skipped a crucial step – getting our lease list. I was eager to get information and use our software that I didn’t think to get crucial baseline information first.
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Find the right solution. Having Diligent’s ESG solutions at my fingertips makes my job a lot easier and gives me confidence in the data that we’re collecting that I wouldn’t have if it ended up in a standard spreadsheet. The actual calculation of our footprint is an afterthought – I can input data and see in real time where most of our GHG emissions are coming from down to the city or office. It’s never too early to have tools and software in place to help you gather, track, and measure as easily and as simply as possible.
How Do You Manage Expectations and Communicate with Leadership and Associated Stakeholders?
At Diligent, we’ve employed a “safe to try” method. We know that we’re building foundational elements for our future work on ESG and, since we’re piloting a lot of new approaches, we have to be willing to try (and fail where necessary). Additionally, it's important to set the expectation that this first year will be challenging. Make it clear that you’re setting the stage right now and that creating good habits takes practice and patience. Once those practices and procedures are in place everything becomes easier, but you must be willing to try and even fail a little along the way.
Ultimately, we focused on four key components of our 2022 deliverables in our first year:
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Establish baseline measurement and reporting of our GHG emissions
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Initiate stress testing and look to improve our ESG solutions as we track our own internal program
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Commit to communicating with our internal stakeholders through town hall updates and other methods of communication
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Share our lessons learned with the broader community
Finally, remember that although it can be daunting when it comes to publishing your first ever ESG Report, with the right tools in place you’ll be able to help create your narrative with relative ease.
For further detail on Diligent’s approach to ESG, check back in on Insights as we publish other blogs in our ongoing series in the coming months.
